Involves Aggregating prospective buyers into groups that
1) have commin needs
2) will respond similarly to a marketing action

Market Segmentation

The relatively homogeneous groups of prospective buyers that result from the market segmentation process. Each consists of people who are relatively similar to each other in terms of their consumption behavior.

Market Segments

This strategy involves a firm using different marketing mix activities, such as product features and advertising, to help consumers perceive the product as being different and better than competing products.

Product Differentiation

The quantity consumed or patronage (store visits) during a specific period

Usage Rate

Framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization.

Market-Product Grid

usage rate is sometimes referred to as this. This concept suggests that 80% of a firm's sales are obtained from 20% of its customers.

80/20 Rule

A means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands as well as a firm's own product or brand.

Perceptual Map

Refers to the place a product occupies in consumers' minds on important attributes relative to competitive products.

Product Positioning

Changing the place a product occupies in a consumers mind relative to competitive products

Product repositining

A good, service or idea consisting of tangible and intangible features that satisfies consumer's needs and is received in exchange for money or something else of value

product

Intangible activities or benefits that an organization provides to satisfy consumers' needs in exchange for money or something else of value

services

Products purchased by the ultimate consumer

consumer products

Products organizations buy that assist directly or indirectly in providing other products for resale

business products

A specific product that has a unique brand, size or price

Product Item

A group of products that are closely related because they are similar in terms of consumer needs and uses, market segments, sales outles or prices

Product Line

All the product lines offered by a company

Product Mix

The four unique elements that distinguish services from goods:

Intangibility
Inconsistency
Inseparability
Inventory

The Four I's of Services

When the service provider is available, but there is no demand for the service

Idle Production Capacity

The seven stages and organization goes through to identify business opportunities and convert them into salable products or services

New-Product Process

The process of managing the entire customer experience within the company

Customer Experience Management (CEM)

The stages a new product goes through in the marketplace:

Introduction
Growth
Maturity
Decline

Product life cycle

In which an organization uses a name, phrase, design, symbols or combination of these to identify its products and distinguish them from those of competitors

Branding

Any word, device (design, sound, shape or color) or combination of these used to distinguish a seller's goods or services

Brand Name

A set of human characteristics associated with a brand name

Brand Personality

The added value a brand name gives to a product byond the functional benefits provided

Brand Equity

A branding strategy in which a company uses one name for all its products in a product class

Multiproduct Branding

A branding strategy that involves giving each product a distinct name

Multibranding

Expanding the four P's framework to include:

Productivity
People
Physical Environment
Process

Eight P's of services Marketing

Integrating the service component of the marketing mix with efforts to influence consumer demand

Capacity Management

Charging different prices during different times of the day or days of the week to reflect variations in demand for the service

Off-Peak Pricing

The money or other consierations (including other products and services) exchanged for the ownership or use of a product or service

Price

Profit equals total revenue minus total cost

Profit equation

The ratio of perceived benefits to price

Value

Value =

Perceived Benefits

_______________

Price

Profit =

Total Revenue - Total Cost

A graph relating the quantity sold and the price which shows how many units will be sold at a given price

Demand Curve

The percentage change in the quantity demanded relative to a percentage in price

Price Elasticity of Demand

The total money received from the sale of a product; the unit price of a product multiplied by the quantity sold

Total Revenue

Total Revenue Equation

TR = P x Q

price x quantity

The total expenses incurred by a firm in producing and marketing a product; total cost is the sum of fixed costs and variable costs

Total Cost

A technique that examines the relationship between total revenue and total cost to determine profitability at different levels of output

Break-Even Analysis

Expectations that specify the role of price in an organization's marketing and strategic plans

Pricing Objectives

Factors that limit the range of prices a firm may set

Pricing constratints

Break-even
point=

fixed cost/ (unit price - unit variable cost)

Unitvariable cost=

variable costs/ units sold

Profit =

Total revenue- total cost

= (unit price * quantity sold) -

(fixed cost + variable cost)

Four general pricing approaches

Competition Oriented Pricing

Cost Oriented Pricing

Profit Oriented Pricing

Demand Oriented Pricing

skimming prices

setting the highest initial price that customers really desiring the product are willing to pay

penetration price

setting a low initial price on a new product to appeal immediately to the mass market

prestige

setting a price so that quality or status conscious consumers will be attracted to the product and buy it

demand oriented approaches

weigh factors underlying expected customer taste and preferences more heavily than such factors as cost, profit and competition when selecting a price level